QUESTION

ABC is into Export of Car Tools, and holds a LUT registration. He applied the refund for the FY 2017-18 on 01-04-2019, but later on, Department issued some deficiencies on 07-06-2019 where they asked to submit further documents. But unfortunately he could not submit those documents. Now, when he is claiming the refund on the basis of original application of refund filed, Department is saying, the refund for the year 2017-18 is `time barred`. So, they can`t process refund application. Application is with Central Department of GST. Whether there is any way through which refund can be claimed for FY 17-18?

ANSWER
 

Facts of the case: ABC applied for refund for the FY 2017-18 on 01-04-2019, but later on, Department issued some deficiencies on 07-06-2019 where they asked to submit further documents. But unfortunately ABC could not submit those documents. Now, while claiming the refund on the basis of original application of refund filed, Department is are saying, refund for the year 2017-18 is `time barred`. So, refund application will not be processed. Application is with Central Department of GST. Whether refund for FY 17-18 can be claimed now?

Law Applicable: SECTION 54 OF CGST ACT

(1) Any person claiming refund of any tax and interest, if any, paid on such tax or any other amount paid by him, may make an application before the expiry of two years from the relevant date in such form and manner as may be prescribed:

CGST RULE 90

(1) Where the application relates to a claim for refund from the electronic cash ledger, an acknowledgement in FORM GST RFD-02 shall be made available to the applicant through the common portal electronically, clearly indicating the date of filing of the claim for refund and the time period specified in sub-section (7) of section 54 shall be counted from such date of filing. 

(2) The application for refund, other than claim for refund from electronic cash ledger, shall be forwarded to the proper officer who shall, within a period of fifteen days of filing of the said application, scrutinize the application for its completeness and where the application is found to be complete in terms of sub-rule (2), (3) and (4) of rule 89, an acknowledgement in FORM GST RFD-02  shall be made available to the applicant through the common portal electronically, clearly indicating the date of filing of the claim for refund and the time period specified in sub-section (7) of section 54  shall be counted from such date of filing.

(3) Where any deficiencies are noticed, the proper officer shall communicate the deficiencies to the applicant in FORM GST RFD-03 through the common portal electronically, requiring him to file a fresh refund application after rectification of such deficiencies.

(4) Where deficiencies have been communicated in FORM GST RFD-03  under the State Goods and Service Tax Rules, 2017, the same shall also deemed to have been communicated under this rule along with the deficiencies communicated under sub-rule (3).

Interpretation: As per section 54 of CGST Act relating to refund of tax, refund can be claimed before expiry of 2 years from the relevant date. The original application of refund that has been filed on  01-04-2019 was within the specified time period of 2 years.

Further in view of Sub Rule 90(4) read with sub rule (2) date of filing of refund claim shall be counted from the date of original filing of such refund and not from the date of filing of fresh application after rectification of deficiencies.

The requirement of filing of fresh application after rectification of deficiencies is only for the purpose of processing and not for calculating the time limit for filing of refund application.

Conclusion: In case of rejection of refund, you can file appeal against the rejection order on above mentioned grounds.

Similar case was decided by Hon'ble High Court of Delhi in favour of Petitioner in case of Insitel Services Pvt. Ltd. V. Union of India W.P. (C) 6486/2020 = 2020 (9). (Reply dt. 02/04/2021)